Critics of the U.S-India Deal have long warned that not only did the arrangement have the potential to undermine the global nonproliferation regime, but it would also make it more difficult to say no to other countries, particularly Pakistan, demanding the same treatment in the future. Unfortunately, the critics’ worst fears are now becoming reality…

Pakistan is no doubt interested in a cooperation agreement for the attractive energy benefits it would offer. However the key factor at work here is likely Pakistan’s desire to be treated on a similar footing as its long-time adversary India. Many observers have noted that the NSGs exemption for India conferred a sense of legitimacy on the Indian nuclear program – despite the fact that it is not a signatory to the NPT – and Pakistan – which has also not signed the NPT – wants similar recognition. As Leonor put it recently, “the fact that we gave India such a sweetheart deal set a very dangerous precedent and it’s no surprise that Pakistan wants a similar deal.”

Pakistan has also noted that by providing India with nuclear fuel and reactors for its civilian nuclear program, the deal would allow New Delhi to divert more of its domestic supply of uranium toward its weapons program. Since Pakistan’s nuclear arsenal and stockpiles of fissile material are considerably smaller than those of India, Pakistan fears that the deal could upset regional stability.

Taking all this into account, Pakistan is beginning in earnest to pressure the U.S. for similar cooperation, and for the first time, some in the U.S. appear willing to explore the possibility.

On February 15, the Pakistani ambassador to the U.S., Husain Haqqani, claimed that “the U.S. is not skeptical about our nuclear program. Talks between Pakistan and the U.S. for cooperation on atomic programs are underway, and we want the U.S. to have an agreement with us like the one it had with India on civil nuclear technology.”

While in the past the U.S. has insisted that the Indian agreement was exclusive to New Delhi, more recent reports suggest otherwise. The Pakistani foreign minister, army head, and spy chief met with Secretary of State Clinton and other U.S. officials from March 24-25 for talks on strategic issues after a nearly two year break. Civil nuclear cooperation was on the agenda, but the U.S. was silent on the substance of what was discussed on the nuclear front – though further talks on nuclear cooperation were not ruled out.

Ambassador Anne Patterson, the U.S. envoy in Islamabad, conceded before the talks that the U.S. is “beginning to have a discussion with the Pakistan government” regarding nuclear power. Though she acknowledged the concerns about Pakistan’s nonproliferation record, Patterson expressed confidence that “we are beginning to pass those and this is a scenario that we are going to explore.” President Obama proclaimed last June that “the Pakistani government has safeguarded its nuclear arsenal. It’s Pakistan’s nuclear arsenal.”

Similarly, Ambassador Richard Holbrooke, the U.S. special representative for Afghanistan and Pakistan, noted: “We have a very broad and complex agenda in these talks, and this is the first strategic dialogue ever at this level, and the first of this administration. And we’re going to listen carefully to whatever the Pakistanis say.”

Support for cooperation with Islamabad has also been growing in strength outside of the government as well.

In a recent Washington Postop-ed, David Ignatius pointed to Pakistani security concerns that “the United States is secretly plotting to seize Pakistani nukes” and suggested that the U.S. should “implicitly accept Pakistan’s status as a declared nuclear weapons state” to counter this misperception.

Georgetown University Assistant Professor Christine Fair suggested a civilian nuclear pact could be just the incentive needed for Islamabad to move to conclusively sever ties with extremist groups, arguing: “We need a big idea for Pakistan, to transform it from a source of insecurity for the region to a country committed to eliminating terrorism and ensuring that nuclear proliferation doesn’t happen again.”

For its part, Pakistan appears to believe that it has significant leverage in pressuring for a deal, as the U.S. believes Pakistan’s support is necessary to stabilize neighboring Afghanistan.

If the U.S. does in fact opt to seriously pursue negotiations with Pakistan on a civilian nuclear energy cooperation agreement, the move has the potential to further undermine the rule-based nonproliferation regime, especially if Pakistan gets a deal that is devoid of any real, meaningful nonproliferation conditions, as was the case with India.

Perhaps there is some comfort to be taken from the fact that securing domestic and international support for such a deal would be incredibly difficult, if not impossible. As Daniel Markey, senior fellow at Council on Foreign Relations, notes“there is zero chance that Pakistan will get a nuclear deal of the sort that we have with India. They cannot get it through Congress or the NSG.” In a move probably orchestrated to demonstrate its commitment to nonproliferation, Pakistan announced plans to investigate A.Q. Khan’s ties with the Iranian nuclear program before strategic talks with the U.S.

But even preliminary discussions about a deal with Pakistan could be detrimental at a time when the Obama administration is preparing for the upcoming Nuclear Security Summit and Non-Proliferation Treaty Review Conference. Rumblings that the U.S. is considering extending special rights and privileges to Pakistan that not even states in good standing under the NPT enjoy would weaken our argument to the international community that we are seriously pursuing our disarmament and nonproliferation commitments.

As I blogged in late February, there has been progress toward implementing the U.S.-India Nuclear Deal. I also pointed out that obstacles remain to the deal’s entry into force, including completion of an agreement regarding a nuclear spent fuel reprocessing facility and approval by New Delhi of a liability limitation bill for U.S. firms.

With the news last week that the government decided not to introduce the Civil Liability for Nuclear Damage Bill in the Indian parliament, there is still no telling when U.S. firms will be able to start reaping the benefits from nuclear trade with India. The tragic comedy that many opponents of the deal warned it would become seems to be playing out as predicted: U.S. efforts to rewrite the rules on international nuclear trade are likely to end up benefiting firms in Russia, France, and other nations much earlier (and perhaps even far more) than their U.S. counterparts…

The proposed liability limitation bill would shield U.S. suppliers from liability in the event of a nuclear accident and make plant operators responsible for damages from any accidents. It would cap legal liability for international nuclear reactor operators at $65 million and limit the Indian government’s financial obligation to roughly $385 million. It would also require that all assertions of wrongdoing be filed inside of 10 years.

Without such legislation U.S. firms would likely be unable to get the necessary insurance to engage in nuclear cooperation. Competitors to U.S. firms such as France’s Areva and Russia’s Rosatom do not require liability limitation legislation because they are covered by protections from their home governments.

While the Indian cabinet has approved the legislation, consideration of the bill was pulled on March 15 by the lower house of parliament, the Lok Sabha. Speaker Meira Kumar deferred consideration after receiving notice from at least four members of the opposition that they intended to block the bill at the introduction stage, as they found it to be in violation of the Indian Constitution and several former Supreme Court rulings.

The ruling government in India largely supports the bill, as it is in their interest to fully implement the U.S.-India Nuclear Energy Cooperation Deal. They argue that the nation requires a liability structure to bring it up to par with global standards, especially given the frequent power blackouts that affect even the capital, New Delhi. Analysts believe Prime Minister Manmohan Singh wanted to secure approval of the legislation before he travels to Washington in April for President Obama’s Nuclear Security Summit. They now estimate he will seek passage of the bill before Obama visits India later this year.

Critics of the bill in India include members of the Bharatiya Janata Party and the Communist Party of India (Marxist). They have voiced concern that the bill is being forced through parliament as a result of U.S. pressure, noting that the ruling government is “safeguarding the interests of the United States at the expense of the safety of Indian people.” They argue that the legislation does not provide adequate protection for residents and leaves the bulk of responsibility for any ensuing land reclamation efforts to Indian citizens. Under the bill, the majority of compensation for victims of nuclear accidents would fall on Indian taxpayers.

One observer notes, however, that the bill does have a loophole allowing the operators of Indian nuclear power plants the “right of recourse” against supplier firms if an accident results “from the willful act or gross negligence on the part of the supplier of the material, equipment or services, or of his employee.” This right is not included in the IAEA’s Convention on Supplementary Compensation for Nuclear Damage (CSC), which India also plans to join, and, according to the observer, should work to allay Indian concerns that the supplier is completely protected, even if the amount is capped. Omer Brown of the DC-based council for the Contractors International Group on Nuclear Liability (CIGNL) also emphasized that joining the CSC would ensure that India would be “eligible to get supplemental funds from the CSC international fund paid by the United States and other CSC Member States.”

Information Minister Ambika Soni has stated that the ruling coalition would pursue an understanding with the opposition prior to sending the measure back to parliament. Science and Technology Minister Prithviraj Chavan also supports reconsideration, noting that “there is no urgency to introduce the bill.” Meanwhile, Foreign Minister Nirupama Rao, who was in Washington early last week, continued to insist that the U.S.-India deal was “proceeding smoothly and satisfactorily,” adding that “we are in the process of operationalizing the agreement through close coordination between our two governments.”

In other news, little progress appears to be being made in negotiations on a spent fuel reprocessing arrangement, which is an additional required step before the U.S. and India can begin nuclear trade. Current estimates are that negotiations may not conclude until after the May NPT RevCon.

One thing we know for sure is that while the U.S.-India deal remains in limbo, countries such as Russia and France, which do not face the same impediments to nuclear trade, will continue to eat up more of the lucrative Indian nuclear energy market pie, estimated to exceed $150 billion in coming years . Will there be any pieces left for the U.S. by the time all of the roadblocks are removed?

In early February, President Obama issued a memorandum certifying that India has placed its civilian nuclear facilities under IAEA safeguards, thereby bringing the Indian Safeguards Agreement into force and moving the two nations another step closer toward cooperation in the field of nuclear energy under the auspices of the landmark U.S.-India deal.

Yet while progress is being made toward implementing the agreement, a few steps remain before U.S. firms such as Westinghouse Electric and G.E. Hitachi can begin nuclear trade with India…

On September 6, 2008, India, with the strong support of the U.S., secured a rare exemption from the 45-member Nuclear Suppliers Group (NSG) allowing it to conduct civilian nuclear trade despite not being party to the Nuclear Non-Proliferation Treaty (NPT). A little over a month later, on October 6, President Bush and Indian Prime Minister Manmohan Singh signed the United States-India Nuclear Cooperation Approval and Non-proliferation Enhancement Act.

Supporters of the cooperation agreement argue that U.S. backing for the exemption indicated “a new chapter of engagement with India.” During the Cold War the world’s two largest democracies were often at odds, as India was the leader of the non-aligned movement and at times sided with the Soviet Union. President Obama has noted that the agreement “will increase American exports and create jobs in both countries.”

Another argument made in defense of the deal is that because India has limited domestic uranium reserves, it needed the ability to trade with other nations to ensure a steady supply. Moreover, it requires India to place its civilian nuclear reactors under IAEA safeguards for the first time. The State Department argues that the initiative “will help meet India’s growing energy requirements and strengthen the non-proliferation regime by welcoming New Delhi into globally accepted nonproliferation standards and practices.”

Critics of the agreement, however, note that by providing India with additional nuclear material, New Delhi could choose to divert more of its domestic supply of uranium toward its weapons program, thereby fueling a potential arms race not only with Pakistan, but with possibly China as well.

They also cite concerns that it could do serious damage to international efforts to curb the spread of dangerous nuclear weapons technologies. While Article IV of the NPT affirms that all state parties in good standing under the Treaty have a right to benefit from the peaceful uses of nuclear energy, the deal allows India to reap rewards without being a signatory to the Treaty. Moreover, India has not stopped producing nuclear weapons-usable fissile material or signed the Comprehensive Test Ban Treaty. Critics fear that extending special rights to India without simultaneously requiring it to make meaningful commitments toward disarmament could undermine the shaky bargain upon which the NPT is based.

India, for its part, continues to insist that all action, including application of IAEA safeguards to civilian nuclear facilities, is voluntary and that its military facilities will remain exempt from inspection.

A few obstacles remain before the U.S. and India can commence nuclear trade. First, India is demanding that the two sides complete an agreement regarding a nuclear spent fuel reprocessing facility. The terms of the U.S.-India deal grant India reprocessing rights under the condition that it establishes a facility to safeguard nuclear material monitored by the IAEA. Indian officials have expressed concern that the U.S. is trying to re-open discussion on the conditions under which it can suspend reprocessing consent rights to India. Current estimates are that such an agreement will be finalized by August of this year.

In addition, New Delhi must agree to join to the Convention on Supplementary Compensation for Nuclear Damage, lest U.S. firms balk at engaging in nuclear trade with India. The Convention would shield U.S. and international suppliers from liability in the event of a nuclear accident and make plant operators responsible for damages from any accidents. While the Indian cabinet has approved the necessary legislation, the national legislature has yet to consider the proposal. Competitors to U.S. firms such as France’s Areva and Russia’s Rosatom are not similarly constrained because they are covered by liability protections from their home governments.

India is aggressively pursuing deals with other nations worldwide, especially those with large uranium reserves. Last week it was reported that Russia planned to follow-up the nuclear cooperation pact it already signed with India last December with a deal next month which would enable Moscow to construct additional power plants. In addition to the U.S. and Russian deals, India has inked agreements with the UK, France, Mongolia, Kazakhstan, Argentina, Namibia, and Canada.

As nuclear trade between the U.S. and India comes closer to becoming a reality, the Obama administration should be concerned that the U.S.-India deal, as well as agreements between India and other nuclear suppliers, could weaken the nonproliferation and disarmament regime at a time when strengthening this regime is a top Obama administration priority.

On January 1, 2011 (10:00 KST) Duyeon Kim, Deputy Director of Nuclear Non-Proliferation at the Center for Arms Control and Non-Proliferation, moderated a 60-minute TV panel discussion on South Korean global broadcaster Arirang TV’s New Year’s Special “2011 Prospects of Global Issues.”.

China remains hesitant to accept the U.S. bottom line on Iran. The two nations this week expressed goodwill and pledged general cooperation on nonproliferation, among other items, but failed to produce concrete plans of action and displayed subtle signs of divergence, as illustrated by today’s press briefing…

The Wall Street Journal described the briefing as an “awkward” affair in which President Obama and President Hu Jintao “exhibited body language that seemed to say they had been frustrated by the entire exercise.” The two presented different tones in their remarks on Iran. Obama’s remarks were forceful: “Our two nations and the rest of our P5-plus-1 partners are unified. Iran has an opportunity to present and demonstrate its peaceful intentions, but if it fails to take this opportunity there will be consequences.” In contrast, Hu was more oblique: “We both stressed that to uphold the international nuclear nonproliferation regime and to appropriately resolve the Iranian nuclear issue through dialogue and negotiations is very important to stability in the Middle East and in the Gulf region.”

Of the P5+1 countries, China has been the most resistant to ratcheting up pressure on Iran. This is no surprise given China’s dependence on Iran for 12 percent of its crude oil imports. When asked today about China’s plan to help deal with Iran, U.S. National Security Council official Jeffrey Bader replied, “I would not say that we got an answer today from the Chinese, nor did we expect one on the subject.”

Policy agenda aside, China made serious efforts to make Obama’s visit as enjoyable as possible. According to the Washington Post, China began last week to regulate its market for Obama souvenirs in an attempt to eliminate insulting images. For example, the wildly popular “Oba Mao” memorabilia got the axe while the Obama-Superman figurine made the cut. Superman beats Mao? That will probably not be a victory for the history books.

Obama did stir things up during a town-hall meeting with Chinese students yesterday by discussing the importance of open government and internet freedom.